Royal Gold to acquire Sandstorm Gold for $3.5B
Royal Gold, Inc. (TSX:RGL) announced it is acquiring the gold streaming company Sandstorm Gold Ltd (TSX:SAND) in an all-stock transaction valued at approximately $3.5 billion.
Under the deal terms, Royal Gold will issue 0.0625 shares of Royal Gold for each Sandstorm share, representing a 21% premium based on Sandstorm’s 20-day volume-weighted average price.
After closing, Royal Gold shareholders will own about 77% of the combined company, while Sandstorm shareholders will hold the remaining 23%.
This acquisition adds 40 producing assets to Royal Gold’s portfolio, expected to produce between 65,000 and 80,000 gold equivalent ounces in 2025, boosting Royal Gold’s production by roughly 26%.
The combined company will have 80 revenue-generating assets, with no single asset contributing more than 13% of net asset value. Precious metals will constitute about 87% of total revenue, with gold accounting for approximately 75%.
“This transaction rewards Sandstorm shareholders in the near term while also offering a compelling opportunity to own a large-scale, world-class streaming and royalty company with continued upside potential,” Sandstorm CEO Nolan Watson said in a statement.
Concurrently, Royal Gold will acquire Horizon Copper Corp (TSX-V:HCU, OTCQX:HNCUF) in an all-cash transaction valued at $196 million.
Horizon Copper will be acquired at C$2 each, representing an 85% premium to its 20-day volume-weighted average price.
Bill Heissenbuttel, Royal Gold CEO, added that this move, along with Royal Gold's acquisition of Horizon Copper, positions it as a leading North American precious metal streaming and royalty company.
“Royal Gold has a 40+ year history of consistently executing a strategy of disciplined growth in gold, and the addition of Sandstorm and Horizon Copper's assets create a global portfolio of precious metals interests that is unmatched in terms of asset diversification, development and organic growth potential, and exploration optionality,” Heissenbuttel said.
Shares of Sandstorm Gold added 7.3% at $10 on the news, while Royal Gold shares fell 7% to about $167.
Source: https://www.proactiveinvestors.com/